A trust is a legal document whereby you transfer ownership of assets to a trust and name someone you have confidence in as the trustee. The trustee manages the trust and makes sure your assets are transferred to your named beneficiaries when you die.

There are many types of trusts that serve different purposes. There are also different types of charitable trusts, but basically, they all share a few of the same characteristics and legal requirements. For the charitable trust, the trust document names a trustee who makes sure the assets in the trust are transferred to the charitable organization you name in the trust.

Beneficiaries of a charitable trust must be one of the following:

• A private foundation.
• A public charitable organization.
• A nonprofit organization.

There may be exceptions to this requirement that an estate planning attorney can explain to you.

Benefits of a Charitable Trust

Charitable trusts are not just for the wealthy. An estate planning attorney will work with you to determine whether your financial situation and philanthropic goals align with establishing a charitable trust. Many people can benefit from establishing a charitable trust. Some benefits in general include:

• Tax benefits. Placing assets into a charitable trust removes them from your estate since they are now owned by the trust—not by you personally. Assets in a charitable trust are protected from capital gains taxes when they appreciate in value.
• Assets pass outside of probate. The assets owned by your charitable trust transfer without going through probate.
• Financial advantages. Property owned by the trust is shielded from your personal creditors.
• Philanthropic intent. Supporting a cause or organization can provide long-term assistance to a charitable organization that shares your vision. Giving can create a lasting impact and continue work that is important to you.
• Sets a precedent for the future. When you establish a charitable trust, you inspire others to participate in charitable giving. You can instil in your family members the importance of giving.
• Financial security. Charitable trusts must be managed according to strict legal guidelines. This ensures that your assets will be passed to the charity according to your wishes.

Contact Charles D. Stark for More About Estate Planning

To learn more about the benefits of a charitable trust, consult with Sonoma County, CA estate planning attorney Charles D. Stark. He has more than 45 years of experience in helping clients reach their estate planning goals. Contact him online or call his office at 707.527.9900.